Exam 18: Rent, Interest, and Profit

The table shows the projected rate of return and number of investment projects that might be undertaken by a small firm. Each project requires an investment of $1,000. If the interest rate decreases from 25 percent to 20 percent, the quantity of loanable funds demanded by this firm

"Pure rate of interest" refers to the interest rate that

If Kelly deposits $10,000 into an account that pays 8 percent interest, compounded annually, and she makes no further deposits or withdrawals, how much will Kelly have in her account at the end of 5 years?

Profits account for a smaller share of total U.S. income than rents.

The real interest rate can be estimated by

Refer to the table representing Darcy's bank account. If she deposited $1,000 into her account at the beginning of year 1 and made no further deposits or withdrawals, which cell(s)represents the future value(s)of the initial deposit if the money remains in the account for three years?

Which would usually not be an entrepreneurial function?

Economic profits are the entrepreneur's reward for taking on the insurable risks of running a business.

Broadly defined, labor's share of national income has been remarkably stable since 1900.

Economic rent, or pure rent, is

The table applies to a loan with an interest rate of 5 percent per period. What value goes in the cell labeled X?

Which of the following resource payments is considered by economists as surplus payments?

Other things equal, interest rates are

Other things equal, an increase in the equilibrium interest rate will

If you pay $2,640 annually on a $22,000 loan A, and pay $1,800 on a $12,000 loan B, then the interest rates are

Which of the following is a source of insurable business risk?

Refer to the table, in which the values for columns (2)through (5)are in acres. If the relevant columns are (1), (2), and (5), land rent will be

Refer to the graph of the supply and demand for loanable funds. A limit of 10 percent on the interest rate that banks can charge for loans will

Some economists advocate taxes on land because such taxes

If a factor of production has no production cost and has a fixed supply, then payments to that factor constitute what economists call